Repossessions drop to 18-month low

chewmylegoff

Graham_Devon wrote: »

These people will usually fall into the camp whereby they only have 2 years. However, one thing I can't find is how SMI works. Do you have for instance an entitlement to 2 year per mortgage, or can you reapply again after 13 weeks.

I believe, though stand to be corrected, that you can reapply after 13 weeks and start another 2 years. I've got no evidence of this other than what I read on an article surrounding it. But it makes sense.

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/BenefitsTaxCreditsAndOtherSupport/On_a_low_income/DG_180321

www.direct.gov.uk wrote:

A two year time limit to SMI for new claimants getting income-based Jobseeker's Allowance was introduced from 5 January 2009.
This affects some people from 5 January 2011. If you have received SMI for two years from 5 January 2009 or later, you will no longer receive help with your mortgage interest. This will apply if you have been getting SMI continually or through linked benefit claims.

This isn't completely unambiguous but it sounds more like you only get one claim, and only receive SMI for 2 years, and then that is it.

I wonder what happens though if you claim jobseekers for 2 years and then retire and start claiming pension credit...

shortchanged_2

chewmylegoff wrote: »

you don't just get SMI because you cannot afford to pay the mortgage interest. there appear to be two main categories of claimants:

(i) pensioners (presumably where their income post retirement is not sufficient to pay mortgage interest which they could afford prior to retirement)

(ii) unemployed (presumably people who could afford the payments but have lost their jobs)

the significant majority are (i).

you can't just say "i cannot afford my mortgage, can i have SMI now please".

if claimant numbers are up (and i presume that they are, especially as the ceiling was increased from £100,000 to £200,000 of mortgage in 2009), then it is likely that is because more people are losing their jobs because we are in a prolonged period of economic woe, not because houses are overpriced (the value/price of houses being mostly irrelevant).

Yes fair enough but lets be honest, the bigger the mortgage the more problematic it is going to be to service if there is a cashflow problem in a household.

This is my gripe with high house prices and the resulting high capital exposure risk. It just increases the likelihood of problems if there are sudden cashflow problems.

ess0two

Graham_Devon wrote: »

I dunno how many times you can ignore this (seems quite a lot), but I'll correct you again.

SMI is being paid to people over 60 with average mortgages of 20k. They will have a LOT of equity, and could therefore easily support themselves after a sale. Whether that be downsizing, or renting.

At the average house price of 160k, after fee's, they would have 130k sitting in the bank and therefore would not qualify for housing benefit.

I'm fully aware you and others will ignore this, but for others reading the thread, the truth should be given.

Fair enough,do we have breakdown of age groups of people benefitting.

Also its probably the first i've commented on this,although you seem to think you keep corrrecting me on this.

Graham_Devon

The government is currently looking at placing a charge on the claimants home if they use SMI, as it's costing an average of £400m this year (£546m last year due to higher rates).

They themselves suggest many could opt out of the scheme, prefering to sell than have a charge on the property which attracts interest. Theres a lot going on with SMI and fairness.

44% of SMI claimants have been on SMI for over 5 years. 27% have been on it for 2-5 years. 30% have been on it under 2 years.

Therefore 70% of the 239,000 claimants are on it "indefinately"

Graham_Devon

chewmylegoff wrote: »

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/BenefitsTaxCreditsAndOtherSupport/On_a_low_income/DG_180321



This isn't completely unambiguous but it sounds more like you only get one claim, and only receive SMI for 2 years, and then that is it.

I wonder what happens though if you claim jobseekers for 2 years and then retire and start claiming pension credit...

Or move to Income Support, ESA etc.

Graham_Devon

ess0two wrote: »

Fair enough,do we have breakdown of age groups of people benefitting.

Also its probably the first i've commented on this,although you seem to think you keep corrrecting me on this.

Yep.

18 - 30 = 1%
31 - 49 = 28%
50 - 60 = 18%
60+ = 53%

The average weekly payment for the over 65's is £29 per week, on a £20,000 mortgage.

Sorry if I hadn't corrected you before. The corrections are on the other thread about it, but it's continually stated (and the point ignored) it will cost more to house people on HB.

chewmylegoff

Graham_Devon wrote: »

The government is currently looking at placing a charge on the claimants home if they use SMI, as it's costing an average of £400m this year (£546m last year due to higher rates).

They themselves suggest many could opt out of the scheme, prefering to sell than have a charge on the property which attracts interest. Theres a lot going on with SMI and fairness.

44% of SMI claimants have been on SMI for over 5 years. 27% have been on it for 2-5 years. 30% have been on it under 2 years.

Therefore 70% of the 239,000 claimants are on it "indefinately"

the govt putting a charge on peoples' homes to claw back the SMI (with interest on the interest if you see what i mean) makes sense to me. i hope they do that.

of course, due to the high number of pension age claimants, it will be called a granny tax if they do, and we will have 1,000s of stories in the daily mail about doris who has paid taxes all her life etc etc. and now the govt is stealing her home which she worked hard for.

then the govt will u-turn in panic.

chewmylegoff

Graham_Devon wrote: »

Or move to Income Support, ESA etc.

Yes, although that is not really a discretionary move, and in any case it sounds to me as if you only get one bite at this regardless of which benefit it is wrapped up in - but the govt site is not clear.

You could ring them up and ask if you want to know for certain.

Graham_Devon

chewmylegoff wrote: »

the govt putting a charge on peoples' homes to claw back the SMI (with interest on the interest if you see what i mean) makes sense to me. i hope they do that.

of course, due to the high number of pension age claimants, it will be called a granny tax if they do, and we will have 1,000s of stories in the daily mail about doris who has paid taxes all her life etc etc. and now the govt is stealing her home which she worked hard for.

then the govt will u-turn in panic.

I dunno, I think the media would quickly catch on to the fact that you can't steal something you are paying for!

In my personal opinion, I would guess we'd simply find loads leaving the scheme and selling to downsize & preserve their assets (i.e. they will have used their money to buy something with no claim attached).

chewmylegoff

shortchanged wrote: »

Yes fair enough but lets be honest, the bigger the mortgage the more problematic it is going to be to service if there is a cashflow problem in a household.

This is my gripe with high house prices and the resulting high capital exposure risk. It just increases the likelihood of problems if there are sudden cashflow problems.

that is all very true, but none of this is relevant to whether SMI can be claimed. SMI can be claimed if you qualify to receive income-related JSA. Cashflow doesn't come into it (except in that you cannot get income-related JSA if you have more than £16,000 of assets besides your home (i think)).

if you don't qualify for income-related JSA and you have cashflow issues, or if the mortgage is large (e.g. if you had a £500,000 mortgage you could only claim £200,000 "worth" of SMI on it), they you aren't going to get any help from the govt.